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From Boomers to Hispanics, Supermarkets Lose CPG Share of Key Consumer Segments

From Boomers to Hispanics, Supermarkets Lose CPG Share of Key Consumer Segments

There’s good news and bad news for supermarkets in the latest consumer spending data.

Let’s start with the good.

Just over half of consumers — 51% — are still eating out less today than before the downturn started, and 90% said they’ll continue to do so, according to SymphonyIRI Group’s Times & Trends report on channel migration.

Now for the negative side. Grocers, which retain the biggest sales shares overall, are losing momentum to other retail formats, and the most troubling part is it involves some of the supermarket industry’s most coveted or loyal shoppers, as outlined in the same report.

In the 52 weeks ended in early July, the grocery channel posted a 0.3 point decline in CPG dollar share, which takes in everything from beverages to general merchandise, to a 47.9% share overall. This compared to gains of 0.1 by supercenters to 18.6%, 0.3 by club stores to 10.3%, and 0.1 by dollar stores to 1.9%.

A closer analysis finds three especially important shopper segments in which supermarkets are losing share:

High Income: Supermarkets lost share (-0.9) with shoppers earning more than $100,000 for the 52 weeks ended in mid-April, while drug stores (+0.5), club stores (+0.4) and dollars stores (+0.1) showed gains. How are dollar stores in particular accomplishing this? These retailers have been broadening appeal to wealthier segments with bigger consumables assortments and spruced up stores, Susan Viamari, editor of SymphonyIRI’s Times & Trends, said in an interview.

Hispanics: Supermarkets are giving up share (-0.7) of these shoppers to drug stores (+0.5), dollar stores (+0.2) and club stores (+1.1). Drug stores may be the most surprising winner here. Some have developed special programs aimed at Hispanics, including with products, signage, and health and wellness efforts, Viamari said.

Baby Boomers: This may be the supermarket channel’s most troubling loss (-0.4) because these consumers are supposed to be solidly in the supermarket camp. Yet boomers picked up spending at supercenters (+0.2), club stores (+0.4) and dollar stores (+0.1).

IRI Times & Trends: Channel Migration: Charting a Course on the Voyage for Value

If there’s any light in the tunnel for supermarkets, it may be this: a growing trend to reduced number of shopping trips with bigger basket sizes, Viamari said.

But supermarkets can’t count on that. They need to closely track what alternative channels are doing and consider potential fixes, which are probably different for each of these consumer segments.

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